Will Apple finally embrace LTE? Imagining the possibilities of a 4G iPad 3

It’s all still unconfirmed reporting, but The Wall Street Journalclaims (subscription required) versions of Apple’s much-anticipated iPad 3 will include support for 4G LTE mobile broadband from both Verizon Wireless and AT&T. The story cites only “people familiar with the matter,” and while the WSJ has a reasonable track record on preempting Apple announcements, the famously secretive company is — well, famously secretive. Few people are likely to know what Apple will announce in regard to the iPad 3 until Apple actually makes an announcement. The latest speculation is that Apple will announce the iPad 3 in early March, with units becoming available three to six weeks later.

If The Wall Street Journal has it right, what could LTE mean for buying an iPad 3, and the rest of the tablet market?

What would a 4G iPad bring?

The primary benefit of a 4G iPad to consumers would, of course, be more bandwidth while out and about. In theory, Verizon Wireless’s and AT&T’s existing LTE networks offer download speeds from 5Mbps to 12Mbps, with upload speeds from 2Mbps to 5Mbps. That would make things like multi-person mobile video conferencing a practical reality. Perhaps in less-boring terms, it also means users could likely watch high-definition television, movies, and other video content on an iPad without having to find a reliable Wi-Fi hotspot.

Verizon and AT&T’s LTE networks represent a significant advance over their existing 3G services. AT&T’s 3G network delivers download speeds of around 1.4Mbps, with about half the bandwidth (roughly 770Kbps) available for uploads. Verizon Wireless’s 3G network usually offers a little less bandwidth, with typical reports putting Verizon 3G at about 1Mbps downstream and about 750Kbps upstream. Of course, these figures vary widely: In some places AT&T routinely does a lot better, while in other locations Verizon is the clear 3G winner. Even 3G users in the same location at the same time can get different network performance, depending on the load on the carrier’s network, other nearby mobile users, local topography, battery levels, and a myriad of other factors. In theory, 4G LTE should offer everyday users about 10 times the downstream bandwidth of existing 3G mobile broadband.

The key words there are “in theory.” In most instances AT&T’s and Verizon’s existing 3G services don’t come close to matching their potential speeds. AT&T’s 3G service should peak at 7.2Mbps downstream, while Verizon’s should top out around 3.1Mbps. Virtually no 3G users on either carrier sees anything like this sort of 3G bandwidth in everyday use, even though their carrier’s networks (and their mobile devices) have the capability. The reasons are complex, and have to do with the frequencies each carrier can use in a particular location, the relative load on their network and cellular gear (which relates to the number of nearby network users and what they’re doing) as well as a particular user’s location, signal strength, movement, and device.

Who benefits from LTE?

As AT&T and Verizon Wireless have repeatedly complained, mobile users’ seemingly insatiable demand for mobile data is not only putting tremendous strain on their cell equipment, but on their network backhaul as well (the hard lines that cell towers connect to). The companies’ existing 3G users want more bandwidth than either company can deliver, and that’s why both companies have had to raise costs and resort to practices like data caps to persuade people not to use 3G service as heavily. Or at least to pay exorbitantly for the privilege.

So, one way to look at Verizon’s and AT&T’s 4G LTE services is that they’re rolling out technology that enables customers to put even greater strains on their already over-taxed networks. It’s an over-simplification, but it holds water: If the nation’s top two mobile carriers can’t keep up with the mobile data demands of existing 3G users, how is adding the even heavier demands of 4G going to help?

The short answer is that it won’t help consumers much in the short term. Although many individual users will see instances where 4G LTE outperforms 3G, to the extent that performance is constrained by provider’s backhaul, local topography, signal strength, and other factors vary greatly. And let’s not forget that, so far, Verizon has had some difficulty just keeping its 4G service operational.

So if consumers don’t benefit much from an LTE iPad, who does benefit? Apple and the carriers.

Apple wins because it gets an important feather in its cap: The market-leading iPad stays ahead of the pack by embracing top-tier mobile technology. Even if most everyday users won’t see huge improvements from LTE, including LTE insulates the iPad from criticism that it lags behind competitive products. Given Apple’s massive buying power and supply chain expertise, it’s quite possible Apple can produce an LTE iPad far less expensively than its competition. Other tablet makers already have trouble competing with the iPad 2 on a price-to-features basis, bundling LTE into the iPad 3 could make that contrast even greater.

LTE has major advantages for carriers too, especially over the long term—although that term may be longer than the usable lifespan of an iPad 3. Managing traffic on an LTE network takes about half the resources of managing equivalent traffic on a 3G network. Looking out further, carriers will eventually phase out 2G, EDGE, and 3G services, and move voice services to LTE and its follow-on technologies. In theory — those key words again! — carriers should eventually be able to push LTE technology hard enough to offer as much as 100 Mbps downstream bandwidth. That’s fast enough to download an HD movie in under six minutes. In theory. Putting LTE in the iPad 3 lets the device be a transitional product that pushes some ardent mobile data users to the carriers’ preferred technology.